Numbers Game

The question is sometimes asked, among trusted colleagues, as they suffer together through a particularly grueling stretch of work: what’s your Number?  If you left the office tonight, checked your bank statements one last time before bed (as one does…), and discovered that some magnificent windfall had increased your net worth to the point that you no longer felt you needed to come back to the office tomorrow: what would that Number be?  At what point would you decide you had ‘enough’ and could choose from then on to do only that which you actually wanted to do, rather than continue to make compromises to get to that point?

In polite company, one rarely discusses matters financial in such concrete terms – one prefers to hint instead at one’s level of compensation through one’s branded possessions, vacation destinations, taste or consciously-affected lack thereof.  Discussions of the Number, however, seem to fall outside this prohibition.  I think this may be because the people with whom I’ve had such discussions over the years all generally believe, with good reason, that everyone in the discussion is likely to be able to hit their Numbers eventually, assuming they choose to maintain their professional status quo.  It’s not a question of one’s pole position (i.e., how much do I have?) as much as one of where the checkered flag is.

I’ve tended to arrive at my Number through pretty simple analysis.  What amount of after-tax cash flow do I think I’d need each year to maintain my desired lifestyle (which does not necessarily involve Per Se for dinner every night, but probably does still involve seeing my trainer twice a week)?  What pre-tax income is required to produce that amount of after-tax cash flow?  Assuming this pre-tax income can be generated from an endowment that produces a fairly conservative 4-5% annual return (net of inflation), I multiply this pre-tax income by 20-25 and have my range of Numbers.  Clearly the definition of “lifestyle” is the driver.  My Number would be much lower if I planned to live in a less expensive city that New York (i.e., basically anywhere) and lower still if my game plan were to retire to a beach in, say, Belize.  It will probably have to be significantly higher if I decide I want to have children.  In any event, I can see a path to getting there while I still have a few decades left to enjoy it, God willing.

By happy coincidence, I read Graeme Wood’s piece from April’s Atlantic shortly after having refreshed my mental calculations and having steeled myself for another 15 or so years of the status quo before I’d expect my Number to be within reach.  I’m still in such (pleasant) shock from this essay that I’m struggling to hone in on what, exactly, was so shocking to me.  Wood paints a balanced, nuanced portrait of the “Secret Fears of the Super-Rich” as they emerge in a Boston College study of people whose net worths exceed $25 million.  Among other gems, I keep coming back to the chilling finding that, “most of [the families in this study] still do not consider themselves financially secure; for that, they say, they would require on average one-quarter more wealth than they currently possess.”  These are people with tens of millions of dollars! People who have done a swan-dive past my Number, straight into Scrooge McDuck’s money bin!  Could these stories really mean that there’s always a white flag after every lap?

There’s nothing particularly novel about the observation that money can’t buy happiness (or, one of hip-hop’s great lessons in causality: Mo Money, Mo Problems) but I had never really considered that it can’t even necessarily buy a sense of financial security.  Or that the price of even hard-earned wealth could be disenfranchisement from the shared human experience.  On feeling unable to discuss one’s everyday problems with those who haven’t hit their Numbers: “The poor-little-rich-kid retort is so obvious—and seemingly so sensible—that the rich themselves often internalize it, and as a result become uncomfortable in their interactions with the non-wealthy. Once people cross a certain financial threshold, they have a tendency to hang out with one another, to enjoy the company of other people who know that money relieves some burdens but not others.”  It must be excruciating to feel as though one has permanently surrendered one’s right to complain or commiserate.

I recommend Wood’s article highly and I expect to use it as a prompt to try to stop counting laps and, instead, start to learn to enjoy driving.

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